MD - Lawyer Review of tPSA

 

As a former (federal) government lawyer, here are my comments on the Tentative Physician Services Agreement (TPSA). 

 

S. 2 “Baseline of a Predictable Physician Services Budget” here the MOH limits its potential costs (with section 3) to 2.5% of $11,584 million,  regardless what the actual cost of growth in health care demand.  I note here that the Financial Accountability Officer (FOA) pegged the costs of increase in health care demand to 2.2% PLUS 3% for inflation per annum for a total of 5.2%.  Therefore the proposed increase does not even fund half the growth in health care demand.

 

3.  PSB Annual Growth.  As stated above the commitment is to fund 2.5% of growth for four fiscal years, which is less than half the predicted growth per the FOA.    This effectively put a hard cap on the portion of health care growth the MOH will finance.  The TPSA does not provide for who will finance growth for the remainder of the increase in health care demand above 2.5%.  Historically, the MOH has reclaimed excess expenses in the form of clawbacks (7% in 2015 alone) and changes to the Schedule of Benefits (SOB).

 

The statement of paying health care needs of a growing and ageing population is moot since, per the above, the MOH limits it’s liabilities to 2.5% of the defined “baseline of a predictable physician services budget”.  The agreement also uses the troubling expression “to pay for…. the MOHLTC’s share of the cost of net new physicians”, which subsumes that the OMA (through their members) will have a share to pay for the cost of net new physicians.

 

Here again, the MOH excludes liability for the actual cost of increase in health care demand by stating “The increases will be based on the planned PSBs for the previous Fiscal Year (i.e. not based on the actual expenditures…) This again leaves a void for the payment of the actual growth of health care demand.  Again, historically this has been levied upon OMA members through clawbacks andSOB changes.

 

The next paragraph confirms that no additional funds, save the one-time payment (in Section 4), will be allotted to cover the actual cost of expenditures for health care demand for the fiscal year 2016-2017.

 

On its face, with paragraph i) the MOHLTC will add additional funding to the PSB where the MOHLTC makes a policy decision to provide a new or expanded services or program to Ontarians.  In my past experience, the definition of what constitutes a “new program” or “expanded services” or “expanded programs” will become the source of much debate as the MOHLTC will submit that a new or expanded service/program was actually a preexisting service, which has simply been modified.

 

Paragraph ii) is very vague and again contention will occur as to what constitutes an “unforeseeable event beyond the control of either party”.  In particular, health care demands increases beyond 2.5% is foreseeable given the report of the FAO.

 

4.  One-Time Payment Increases.  Here the amounts are clear, if small compared to the cost of inflation (3% per the FOA).  This clearly underfunds actual increases in health care demand/expenditures.  This section uses vague wording that is not otherwise defined “using principles of relativity, appropriateness and value for money to support health care priorities for patients”.  The co-management process is further defined in Section 5, but it is not clear whether the MOHLTC will have the right to unilaterally turn down or veto payment.  The use of “the principles of relativity, appropriateness and value for money” are vague and leave a lot of wiggle room to the MOHLTC to back out of paying the one-time payment.   “Health care priorities for patients” is not defined and could be interpreted by the MOHLTC as its own priorities since they purport to support patients and the health care system.

 

The next paragraph allows the MOHLTC to claw back from the one-time payment any excess in actual expenditures/demand that is over and above the planned 2.5%.  For fiscal years 2017-2018, 2018-2019 and 2019-2020, any excess demand/expenditures above the 2.5% as defined in the TPSA “co-management process”.  Here my reading of the expression “including reductions on any future one-time payments under this PSA” means that they can claw back future years’ one-time payments, in addition to reducing the current fiscal year’s payment.

 

5.  See my comments in Section 4.  At the very least the first statements holds OMA members jointly responsible for any expenditures in excess of the planned 2.5%.  The expression of “modernize the Schedule of Benefits and other payments to physicians” is again not defined.  It is not clear whether the Medical Services Payment Committee is a MOHLTC Committee or a joint Committee with OMA.  It is not clear what role, if any, the OMA would have under this Committee.  The paragraph mentions that the OMA and the MOHLTC will be supported by external expert advice (undefined, no criteria for selection) and a facilitator (who will be appointed permanently by the Parties – MOHLTC and OMA).  Where the Parties are unable to agree on the methodology for modernization of the SOB and other payments, reconciliation, or the distribution of one-time payments, the facilitator’s recommendations will be binding (Paragraph d).  The TPSA however specifically excludes from the facilitator’s recommendations with respect to “determining what money or how much money needs to be saved or spent.

 

THE MOST CONCERNING ASPECT IS THAT IN SUBSECTION (i) and (ii) the permanent fee or physician payment reductions of $100 million dollars must be achieved firstly by April 1, 2017 and another reduction of $100 millions must be achieved by April 1, 2019.

 

(b) see my comments above w/r/t “principles of relativity, appropriateness and value for money to support healthcare priorities for patients”.  The use of the phrase “in order to minimize the impact of any subsequent adjustments to physicians and patients” leaves the door open for clawbacks in the amount of excess expenditures above 2.5%.

 

c) Apparently the MOHLTC believes there is an evidence-based approach to physician billing practices and the OMA (and its members) will be bound by it.   Here the TPSA introduces the concept of progressive discounts on fee-for-service billings above $1 million per year.   Group practices have a particular interest in this provision.  By using the expression Co-management will be an ongoing process and may include a variety of actions and considerations of various issues including, but not limited to”  means that the MOHLTC can add actions and considerations as it pleases.  It is not clear what is meant by the subcategory “monitoring of data such as expenditures, utilization, practice patterns, and billing profiles”

 

(d) see comments at paragraph 5 above regarding the facilitator, and the power of the facilitator to impose a final resolution w/r/t the methodology for modernization of the SOB and other payments, reconciliations, or the distribution of one-time payments, but is expressly prevented from making recommendations regarding “what money needs to be saved or spent”.

 

The Parties agree to review terms of Reference for the Physician Services Committee, which is an appendix to the OMA Representation Rights and Joint Dispute Resolutions Agreement, in order to make amendments to implement the TPSA.  I have not reviewed this Agreement nor will I.

 

6.  Here the OMA and MOHLTC will negotiate amendments to primary care physician agreements by November 1, 2016 in order to “improve” evening, weekend and holiday coverage, 24 to 48 hour access for “urgent conditions” (not defined, a cough for 20 minutes could be urgent to some patients), reporting upon “physician (..) access issues”.  This may leave the door open for patients to complain that they don’t have timely access to their physicians during or after hours of operation.

 

This section also restores managed entry per the 2012 PSA, but specifies that any additional expenditures arising from these initiatives will be managed within the PSB (i.e. nonew funding). 

 

If OMA members are able to improve weekend and holiday coverage, provide 24 to 48 hour access for urgent conditions and report upon physician resources and access issues, then the MOHTLC agrees to recommend amendments to sections 29 and 38 of Bill 210.

 

Section 29 provides that the Lieutenant Governor in Council may make

regulations requiring prescribed persons and entities to provide information and reports to a local health integration network about the following for planning, performance management and any other duties of a network:

    1.  Physician resource issues such as opening and closing of practices, transitions and changes to practices, retirements from practices and change of location of practices.

    2.  Physician practices in the local health system such as policies for accepting and discharging patients, practice profiles, practice wait-times, and practice coverage for after-hours services, vacations, leaves and other absences.

Section 38 provides

39.  (1)  Section 67 of the Health Protection and Promotion Act is amended by adding the following subsections:

Engagement with LHIN

   (5)  The medical officer of health of a board of health shall engage on issues relating to local health system planning, funding and service delivery with the chief executive officer or chief executive officers of the local health integration network or networks whose geographic area or areas cover the health unit served by the board of health.

8.  OMA Litigation (the Charter challenge for binding arbitration).

Schedule paragraph 2 seems to protect the OMA but actually protects the MOHLTC by preventing introduction into evidence or submissions (by Counsel) of matters discussed between the OMA and the MOHLC during the period that began in October 2015 through to the process of negotiation in 2016 in relation to PSA 2016.

Paragraph 3 provides that the OMA Board of Directors “may” send PSA 2016 to the OMA membership via a referendum and then to OMA Council for ratification.  The use of the word “may” means that the OMA Board of Directors is not required to make a referendum for ratification.

Paragraph 6 provides

 

6. The OMA agrees that, if PSA 2016 is ratified, then it will amend its Notice of Application to delete paragraphs 1(b) – (k), (m) and (o). The Respondents agree that they will consent to such amendments on a without costs basis. The parties agree that the claims made in these paragraphs shall be deemed to be settled and released by the OMA with prejudice and without costs.

This means that the OMA would no longer seek a declaration that a number of provisions made under Regulation 552 (to bring into effect the clawbacks) are unconstitutional and of no force and effect.  This means that the OMA would no longer seek to have the clawbacks made in January and September declared unconstitutional and of no force and effect.  The same applies for the New Graduate Entry Program.   

In addition, it would remove provisions of the Notice of Application (the Charter challenge) seeking a declaration that the Minister has breached his agreement with the OMA under the OMA Representation Right and Joint Negotiation and Dispute Resolution Agreement.  The OMA would also drop the provision that sought an order that the Minister establish a binding dispute resolution process to compensate physicians for their losses brought about by the cutbacks.

This effectively guts the Charter challenge of the MOHLTC unilateral actions instituting clawbacks.

In the next paragraph, the OMA agrees that it will not seek damages (money) under the remedy section (s.s. 24(1)) of the Charter.

The OMA then agrees that it will not seek, support or be entitled to any remedies in the Charter challenge or any other proceedings other than an order for a binding dispute resolution to resolve bargaining impasses between the Ministry and the OMA in respect of physician compensation.

In paragraph 9 of the Appendix, the Minister of Health agrees not to take unilateral action in respect of matters governed by the PSA 2016 until after the decision of the first instance court of the OMA Charter challenge.

This is a very important part of the TPSA as it effectively guts the Charter challenge brought by the OMA.  By removing all of these provisions the only thing left is whether the Court would order binding arbitration.  In the absence of a finding of a breach of the Charter this is unlikely.  The imposition of binding arbitration would be a remedy to the breaches of the Charter and Physician Services Agreement.  No breach, no remedy.  Since there is no actionable constitutional breach, the MOHLTC would be in a position to say, if the TPSA is ratified, that the Application is moot since an agreement with respect to physician services has been reached and executed between the OMA and the MOHLTC.  Ratifying this TPSA essential means losing the Charter challenge.

In summary, the TPSA continues to underfund health care demand and utilization.  The MOHLTC specifically limits its liability to 2.5% of $11,584 million.  It does not provide how amounts over and above this limit will be funded.  Historically, this has taken the form of clawbacks. While on its surface the amounts allotted for one-time payment increases seems favourable, subsequent provisions allow the MOHLTC to make clawbacks to these amounts for any expenditures over and above the 2.5%.  This clawback applies to the fiscal year in progress and to future years.

The TPSA contains a number of vague expressions and provisions which will leave a lot of wiggle room for the MOHTLC to back out of its obligations under the TPSA.  The TPSA provides for an ill-defined co-management process between the MOHLTC and the OMA.   The powers of both Parties are not defined (i.e. the MOHLTC could act unilaterally).  In addition, if there is a disagreement with respect to the modernization of the Schedule of Benefits, the TPSA provides that a facilitator will make a finding that is binding on the OMA.

The TPSA provides that the OMA and MOHLTC will negotiate amendments to primary care physician agreements by November 1, 2016 in order to “improve” evening, weekend and holiday coverage, 24 to 48 hour access for “urgent conditions” (not defined, a cough for 20 minutes could be urgent to some patients), reporting upon “physician (..) access issues”.  This may leave the door open for patients to complain that they don’t have timely access to their physicians during or after hours of operation.

Very significant changes are agreed to the Charter challenge if the TPSA is ratified. It effectively guts the Charter challenge.  By removing all of these provisions the only thing left is whether the Court would order binding arbitration.  In the absence of a finding of a breach of the Charter this is unlikely.  The imposition of binding arbitration would be a remedy to the breaches of the Charter and Physician Services Agreement.  No breach, no remedy.  Since there is no actionable constitutional breach, the MOHLTC would be in a position to say, if the TPSA is ratified, that the Application is moot since an agreement with respect to physician services has been reached and executed between the OMA and the MOHLTC.  Ratifying this TPSA essential means losing the Charter challenge.